Failing Health Care Co-ops Will Cost Taxpayers

Consumer Operated and Oriented Plan Programs (COOPs) were really a political compromise between Members of Congress who wanted a public plan option and those who didn’t. Once the Affordable Care Act passed, COOPs had outlived their usefulness. However, they are now failing and will cost taxpayers plenty. Senior Fellow Devon Herrick testified before a congressional committee.

School Choice in San Antonio

The Horizon Program, the most sweeping experiment in school choice ever attempted in the United States, began in 1998 in the Edgewood Independent School District (EISD) in San Antonio, Texas. The Children's Educational Opportunity (CEO) Foundation offered a privately funded full tuition scholarship to any low-income student in the district who wanted to attend another school, private or public. About 90 percent of the 13,500 students in the predominantly Hispanic district are considered economically disadvantaged.

The sponsors committed a minimum of $5 million a year for 10 years to the program. Their goal was not only to give low-income families a choice of schools but also to determine the overall impact of choice on students, schools and the community. The sponsors contracted with an independent research group to do annual evaluations of all students in the district.

During the first school year, 1998-99 the program gave 837 scholarships to children from kindergarten through 12th grade. Of this group, 566 transferred from EISD schools, 116 were starting kindergarten, 105 lived in the Edgewood district but had been misrepresenting their address to attend public schools in other districts and 50 were already in private schools.

An evaluation of first-year results by researchers from Mathematica Policy Research and the Harvard University Program on Education Policy and Governance answers some of the major objections raised by opponents of school choice.

No Evidence of Creaming

Opponents of voucher programs frequently argue that they will lead to "creaming," or a skimming of the best students from public schools, leaving behind poorly performing students. But the first-year evaluation found few statistically significant differences between students in the Horizon Program and those who remained in the Edgewood public schools. According to the study:

On the Iowa Test of Basic Skills given during the 1998-99 school year, the Horizon students scored somewhat higher in reading than the public school students - their average score was at the 35th percentile compared to 28th percentile for public schools students.

The Horizon students scored a little higher in math at the 37th percentile compared to 34th.

Neither of these numbers appears to indicate that creaming occurred.

The Edgewood school district's own testing in the fall of 1997 of all students showed similar results when scores of those who accepted Horizon scholarships the following year were compared with those who remained in the district's public schools. The Mathematica study also noted that Horizon students were no more likely to have participated in public school programs for gifted students than were those who remained in the district's public schools.

Family Characteristics Similar

The Horizon Program answers the argument that, because they are less educated, low-income parents will not take advantage of vouchers. The Horizon families are remarkably similar to Edgewood public school families.

The difference in average income between Horizon and public school families was only $51, with Horizon families making $15,990, compared to $15,939 for public school families.

Mothers of voucher students completed an average of 12 years of education compared to 11 years for public school mothers.

Four percent of Horizon mothers were receiving welfare compared with 5 percent of public school mothers, and 45 percent of Horizon parents were living together compared to 43 percent of public school parents.

Parents Chose Schools for Academics

Critics of school choice argue that low-income families are more concerned about location, sports programs or religious instruction than about academic quality. Surveys of parents of Horizon students do not bear this out.

Some 80 percent said that academic quality, teacher quality, discipline and classroom instruction were all "very important" reasons for choosing the program.

Fewer than 15 percent said that sports programs were a factor.

As Figure I shows, when Horizon parents were asked for the single "most important reason" for choosing the their child's school, almost 40 percent cited academic quality. By contrast, only 11.9 percent of parents whose children stayed in public schools cited academic quality first.

Better Learning Environment

Almost as important among Horizon parents was having a better and more secure learning environment for their children. Both parents and students reported the children received and did more homework than their public school counterparts. Both Horizon and public school students tended to say positive things about their teachers, but 16 percent of the Edgewood students did not think the teaching was good, as compared to 8 percent of the Horizon students. [See Figure II .] Horizon parents reported significantly less fighting, fewer guns and other weapons and less destruction of property than did public school parents. The students reported fewer class disruptions, less fighting and less cheating than did the public school students. Between 92 percent and 96 percent said they had no friends who smoked cigarettes, drank alcohol, used drugs or were gang members; only 82 percent to 88 percent of public school students said the same.

Program Provides Greater Stability

Most educators believe students will do better if they stay in the same school for an entire school year. Fewer Horizon students changed schools during the school year than did their public school counterparts.

About 93 percent of Horizon students remained in the same school for the entire school year, compared to 84.4 percent of public school students.

While 22 percent of public school students changed schools because they moved, Horizon students who moved were not required to change because of a move, and none did.

Conclusion

Independent studies of the first year of the Horizon Program indicate that it is on a successful path. Rather than the dire consequences predicted by the Edgewood Independent School District and other opponents of the project, the Horizon Program does not appear to have destroyed, or even significantly dented, the public school system or its funding. The 566 students who left the district accounted for only 3.7 percent of the total enrollment. Further, in the first year of the program EISD lost no funding due to these students' departure because state funding is based on the prior year's enrollment. Thus it actually received money for students it did not teach. When the loss hit in the 1999-2000 school year, it was only 3 percent of the district's budget - and the district had to provide services to 566 fewer students.

While the first independent evaluation focused on the Horizon Program students and parents, a second independent evaluation due out in August 2000 will address the changes and adaptations made by the school district in response to the Horizon Program.

Melanie Looney is an intern with the National Center for Policy Analysis.

Note: Nothing written here should be construed as necessarily reflecting the views of the National Center for Policy Analysis or as an attempt to aid or hinder the passage of any legislation.

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